The cotton price has fallen significantly in recent days and was trading at a four-week low of 63.7 US cents per ton for a time yesterday following the considerable appreciation of the US dollar.
Heavy rainfall in the growing regions in Texas could give the recently weak cotton price a boost. Weather forecasts are predicting that the next two weeks will see twice as much rainfall as would normally be expected at this time of year. Planting of the new cotton crop in Texas is already lagging noticeably behind schedule.
According to the US Department of Agriculture (USDA), only 19% of the fields had been sown by mid-May, as compared with a figure of 34% by this time last year, notes Commerzbank. Texas is the leading cotton growing state in the US.
The China Cotton Association reports that Chinese cotton imports in the first four months of this year were 38.2% down on last year. Accordingly, China imported around 600,000 tons. April saw imports decline by 28.3% year-on-year. The lower imports are a consequence of China's revised cotton policy which aims to stimulate the domestic cotton market. According to the USDA, cotton stocks in China total a good 14 million tons, which accounts for 60% of the world's cotton stocks.
